By: Early in my career, performance reviews often included discussions on business acumen. As a classically-trained engineer, I often thought it was a bit of a stretch that I should be required to have a depth of knowledge in both engineering and business. However, employers do not have time for philosophical debates on what someone should or should not be expected to know; instead, they often focus on what knowledge produces the greatest outcomes. And, what they found is that those who understood how their technical work related to the business goals ended up being the best overall contributors. Going forward, we will begin to see more of a focus throughout organizations on technology acumen with the ultimate goal being employees who are multi-dimensionally skilled in both business and technical domains.
Business Acumen
Skills and knowledge that organizations value highly are methodically introduced into employees at all levels. In most organizations, there are several learning and development opportunities to develop business acumen. For example, there are very few employees within the modern organization that do not understand how to calculate revenue, expenses and ultimately profit margin. Ambitious employees who want to expand their capability and responsibility will often study the mechanics of a balance sheet and statement of cash flows. And while the finance team ultimately owns the income statement, balance sheet and statement of cash flows; there are numerous employees who understand the mechanics of financial statement. In addition, one of the key requests prior to getting any new project approved is the business case – What is the investment required? What are future cash flows? What is the estimated payback period? Whenever these requests are made, employees regardless of education background will open a financial modeling tool like Excel and develop the baseline calculations. Members of the finance team will ultimately validate the accuracy of these projections. The key takeaway is that business acumen is a key skill for any employee that wants to be successful in a modern day organization.
Technology Acumen
In the early days of technology integration into the workplace, employees had to quickly develop a new set of skills. From learning how to use a computer for word processing or using spreadsheets for financial & accounting management, many of these systems were laser focused on performing a single task well. At this point, there are those who can put together impressive presentations using Microsoft PowerPoint or Apple Keynote. However, this skill set is now considered so common place that most do not even add this information to their resume.
Over the next several years, we will begin to see those who are able to utilize programming skills to rapidly build prototypes to test a more efficient process or to accomplish a value added business task. Python, Ruby on Rails & other programming languages are frequently listed on resumes because it is currently a big differentiator. However, as more and more employees recognize the value of these skills and employers demand that regardless of undergraduate study; there must be a baseline capability of coding skills, we will begin to see these practical skills be leveraged at a higher and higher rate.
One of the biggest drivers of this change is an increased representation of technical leadership in organizations that would not typically be considered tech companies. For example, Mattel recently hired a Chief Technology Officer to not only manage the information technology systems but to also figure out how to integrate technology into their toys. This decision is no doubt closely related to the appointment of Margo Georgiadis, former Americas President at Google. One of her big initiatives is to figure out how design toys to collect data from users and then use that data to design better toys. Technology acumen will be inescapable at Mattel.
Similar to business acumen, members of the technical team will ultimately validate whether a proposed solution has merit. However, it will have to be at a level where it can be evaluated for the merits based on efficiency of technical solution, hours required to build the solution, and how it integrates into the overall system architecture.
Outcome Based Solutions
Those who are non-technical may feel that this is a difficult evolution. This would not be too dissimilar from how technical folks felt when business acumen became increasingly important. However, we believe that this trend is ultimately a recognition that talented employees will always be required for organizations to be successful. Fundamentally, companies are in the business of developing solutions for customers. The emerging trend is for these solutions to elegantly combine both technical and business acumen. Knowing the way the market is moving helps us best prepare our children for success.
For the last several decades, employees have often pursued an MBA (Masters of Business Administration) to dramatically improve their earnings potential. Over the next several years, we will start to see graduate coursework that combines both technical and business acumen. There are some top-tier schools that are way ahead of the pack – Stanford offers a joint MBA degree in computer science and electrical engineering, Harvard offers a joint MBA degree with the engineering program, and MIT offers a joint MBA & engineering degree in partnership with leading global companies.
Over the past several years, MBA programs have seen challenges with maintaining and growing enrollment. While some blamed the explosion of the number of programs and the associated oversaturation, I think this misses the emerging trend. Employers are the ultimate customers of MBA programs and collegiate education in general. Essentially, employers were not seeing enough return on their investment from prospective employees just having business acumen. Instead, they also began to demand technical acumen. This is why we began to see the explosion of coding bootcamps. However, employers did not have a great way to validate the efficacy of these programs. As a result of students not seeing large pay increases or finding employment at all, we have seen significant consolidation in this industry. Their preference is and will likely continue to be utilizing proven educational models at traditional institutions. We will also see this combination of business and technical acumen development at the undergraduate level and ultimately foundations will begin to be built at the elementary, middle and high school levels.
From a consumer perspective, this will be very exciting. Solutions that will be developed by the next generation based upon their knowledge of both business and technical will be extremely compelling.